Disappeared News

by Larry Geller

Japanese Prime Minister Yoshihiko Noda announced his decision to join the Trans-Pacific Partnership before leaving Tokyo for the APEC 2011 meeting in Honolulu. If Japan goes forward with placing all of its commodities under the TPP, it would mean the end of centuries of rural rice farming and threaten the country’s food security. Of course, Noda is supporting corporate interests which, under the rubric of restoring “prosperity” to Japanese exports, are quite willing to throw tradition and food security aside in the interests of restored profitability.

Rice is one of the few crops in which Japan is self-sufficient, and opponents of the TPP argue it would destroy the country's agricultural sector and reduce food self-sufficiency to 13% from the current 39%.

[Wall Street Journal, New Zealand: Japan Must Include Rice in TPP Talks, 11/14/2011]

Vultures are already salivating at opportunities presented by the likely death of Japan’s rice farming promised by the TPP.

Japan must put its main staple on the table if it wishes to join talks over the Trans-Pacific Partnership free-trade agreement, New Zealand Trade Minister Tim Groser said.

"The negotiation must include rice," he said in an interview Sunday, if the TPP is to set a comprehensive market-opening example for the rest of the region.

Japan must maintain high tariffs to fend off subsidized exports of countries eager to break into a lucrative market. There is no question that without the support of import tariffs, rice farming would rapidly come to an end, first devastating rural economies and then savaging Japan’s ability to feed itself.

Japan’s rice farmers have long developed cooperative methods of producing rice, but the costs of domestic production are still high. Japan has no equivalent to the huge industrial ag tracts of the American midwest. Farmers typically share cultivating equipment, which moves from farm to farm during the harvest season, for example. Still, they could not compete with cheap imports.

They would not be alone. There are plenty of examples of the effects of predatory exports on the core agricultural economy of formerly self-sufficient countries.

We need look no further than Haiti, in our own hemisphere. Most of the loss of life in the Haitian earthquake took place in the shantytowns where displaced rural families fled in search of jobs. What happened to rice cultivation in a country

Nearly two centuries of rice cultivation shows that Haiti was self-sufficient in its rice supply up until 1980. However, following a severe flood in the 1970’s that drastically reduced the island’s yield, U.S. companies began to send shipments of rice to the island, soon using their subsidized crop to undersell local farmers.

The next major development affecting the Haitian rice market took place after February 7, 1986 when President Jean-Claude “Baby Doc” Duvalier was ousted from power following a coup d’état. Shortly thereafter, General Henri Namphy took over control of the country. Once in power, the U.S. government coaxed his regime to liberalize Haiti’s economy by slashing import tariffs, closing state-owned industries, reducing the budget of the government agricultural agency in the Artibonite Valley (the primary region where rice is grown), and opening all of its ports to commercial activity.

[Worldhunger.org, Has the US rice export policy condemned Haiti to poverty?, 4/23/2010]

That loss of food security can devastate a country. The Haitian example is clear.

In 1994 the Haitian government entered into a new agreement with the IMF that contained a "medium-term structural adjustment strategy" which "included sweeping trade liberalization measures." In 1995 when this agreement went into affect, Haiti's tariffs on rice imports were cut dramatically from 35% to the current level of 3% (the bound tariff on rice imports is 50%). By comparison, the Common External Tariff on rice in the CARICOM (Caribbean Community) zone for rice in 1999 was 25%.
…
Rice import tariff reductions in Haiti has made it more difficult for local rice producers to compete with imports. An article published in 1999 after evaluating agricultural and food price policy in Haiti concluded that "reducing tariffs on both rice and corn, decreased retail and farm prices and increased consumption and imports." This is also confirmed by the IMF which in a report 2001 states "Trade liberalization has contributed to a large increase in imports of rice. At the same time, domestic production has gone down substantially."

Some argue that the resulting flood of relatively cheap rice imports originating mostly from the United States has had a negative impact on Haiti. The decline in the demand for Haitian rice has been devastating to an already desperate rural population. Rice farmers are some of the most vulnerable members of the population; the alternative employment options for farmers in Haiti are extremely limited.

Furthermore, competition between Haitian and American rice growers is not exactly fair. While US rice production is "subsidized through a variety of mechanisms", the small, struggling domestic rice industry in Haiti receives no support from the government. Rice farmers do not receive export subsidies or other types of domestic support. According to Mark Weisbrot, Co-Director of the Center for Economic and Policy Research in Washington, "You can't expect a country like Haiti to compete on world markets immediately. If you look at those countries that have succeeded in dramatically increasing their per capita incomes -- countries like Japan, South Koreas, and Taiwan -- you will find hey all did it under some kind of protection."

[american.edu, Trade and the Disappearance of Haitian Rice, 6/2004]

The Haitian example is one of many. US corn exports increased dramatically as a result of NAFTA, which resulted in the flood of workers into the USA seeking what work they can get. Yet Mexico has expressed an interest in joining the TPP pact.

Canada is reported to have shown an interest in the TPP at the APEC talks, after months of dragging its feet. Should Canada join, it would have to give up protection for its dairy and poultry industry. But because Japan may join the TPP, Canada may find other TPP countries may gain access to a lucrative Japanese market and displace Canadian exports. Canada may decide to kiss its chicken farmers goodbye and aim for the promises of a newly opened Japan.

Nowhere in the negotiations in Honolulu has the issue of job loss due to imports come up. Obama touts job gains for American workers but omits the losses caused by floods of cheap imports that destroy American industries. TPP would be NAFTA all over again, and arguably would mean net job losses in this country and in other signatory nations. Just what jobs will Japan offer to out-of-work farm families throughout its large rural population? The numbers touted by Obama and other leaders are always one-sided: exports will be boosted. The problem, of course, is the job devastation resulting from imports.

Permalink posted by Larry @ 11/14/2011 08:05:00 AM